Retailer Roundtable: COVID-19 is still playing a role in produce departments
When foodservice operations shut down in the spring of 2020 because of the COVID-19 pandemic, supermarkets experienced a big jump in sales with fresh produce a favored item among consumers. Are the numbers still up? Are other factors such as inflation and labor causing issues?
The Produce News asked several veteran retailers to answer a few questions about produce retailing in these times of continued COVID-19 concerns and rising costs. The following retailers responded to our inquiry: Vince Mastromauro Jr., produce director for Sunset Foods, based in Highland, IL; Mike Roberts, vice president of produce operations, Harps Food Stores Inc., based in Springdale, AR; and Jeff Tomassetti, director of produce and floral operations for Buehlers Fresh Foods, based in Wooster, OH.
Two years into COVID-19, what level of produce sales is your chain experiencing: pre-COVID-19 levels or still enhanced?
Vince Mastromauro: Sales are still good, but a lot of customers are still practicing social distancing or are wearing masks. It’s difficult to engage with customers like we used to do. I’ve always thought of the produce department as my stage. I could get a nectarine off the shelf, cut it in slices and engage a lot of customers with one nectarine. The display would soon be empty. It’s not easy to do that anymore.
Mike Roberts: Still enhanced but mainly due to inflation; volume is flat or slightly down. Packaged and bagged produce is still trending slightly up.
Jeff Tomassetti: We are still experiencing enhanced sales, but the trend line is starting to level off. Units are down but with inflation we are staying ahead of sales budget and prior year. We are back to bulk display but still trying to push pre-packaged or grab-and-go items to make it more convenient for our customers.
Has traffic within the store returned to pre-COVID-19 levels, and what is happening with online produce and grocery sales?
Roberts: Traffic is still up, which could just mean more trips to the store vs. 2021. Online is up over 2019 but down from the height of COVID-19.
Tomassetti: Traffic and customer counts are down in some locations and up in others. Online is still strong; we had to expand the area in all stores — and it continues to grow.
Mastromauro: We are doing more sales than pre-COVID-19 but slightly below the levels of 2020 and 2021. Business is good but people are no longer hoarding.
What role is inflation playing in your produce sales?
Tomassetti: Inflation is definitely playing a big part of the sales increase. We do see consumers shopping our ads more, but we also see our value-added sections and pre-packaged premium items growing. Trimmed and packaged corn, cut watermelons spears and tenderloins, fresh fruit parfaits — they are all premium priced and selling better than ever.
Mastromauro: Inflation is a big issue. Everything is higher priced. Our customer base is an upscale customer as we have a lot of doctors and lawyers and even the local professional athletes. I can’t say they are cutting back on what they buy, but they are coming in more often and buying less each trip. I am a shopper as well and I know customers do not like sticker shock. I have reached out to my wholesalers and have told them to charge me what you must, but be careful of sticker shock. I’m conservative. If I have to go up $1 in my price, I like to do it slowly — maybe 50 cents at a time. It seems as if everything is higher priced, as much as $15 to $25 a case. I have talked to my wholesalers, and I am asking them to give me notice. Right now, we are starting the summer fruit season. I wanted to know how much I have to go up to make my numbers.
Roberts: It is causing the consumer to buy more value driven items. Our Pick 2/$5 program has seen growth, and our cost plus banner has seen an increase in sales vs. our conventional banner.
Are you still experiencing supply chain issues on domestic or imported produce?
Mastromauro: I haven’t had major, major issues getting product. Weather occasionally causes a delay but for the most part, we have had no shortages and we didn’t have them during the pandemic. Occasionally we couldn’t get a particular SKU, such as a specific bagged salad, but overall, here in the Midwest, we had no problem getting product. A lot of the increased costs have to do with logistics. Inflation, labor shortages and logistics — it’s like the perfect storm.
Roberts: Packaged items are still an issue with some packing plants having labor shortages. The other supply chain issue we have is delayed trucks and fuel prices causing increase in freight rates.
Tomassetti: We are actually seeing pretty good supply but the freight rate and getting it delivered on time has been a nightmare. Costs are so high mainly due to increased freight costs. Freight out of Florida seems really high and challenging. Also, getting potatoes loaded from Idaho has been a real challenge.
What’s the retail labor situation looking like?
Roberts: We are still slightly understaffed but manageable and nothing compared to the same time last year.
Tomassetti: Staffing has been an issue for the past several years and continues to be a problem in retail. We have job fairs monthly; we interview 30-40 candidates and we are lucky if we actually hire six people. We are much better staffed than we were a couple years ago, but it is still a challenge to keep staff.
Mastromauro: It’s very difficult right now. I’ve lost a couple of produce managers already this year. Workers are looking at their options. Right now, we have a shallow labor pool and the employee has the power. They are demanding higher wages. I get it. Costs are going up; they want to get paid more, and employees are in charge right now. A couple of our people have gotten out of the retail business and taken jobs in other industries. We offer a lot of benefits in retail. Employees are changing jobs and leaving their benefits behind. I get it to a point, but it’s not the way I ever looked at it.